Bubble fears still haunt Chinese housing markets

Beijing is stepping up curbs on property market speculation after prices surged in one area of the capital, raising concerns some bigger cities may also tighten purchase rules.

China’s year-long slump in the housing market has dragged on the economy but there are fears bubbles are forming in some big cities even as prices in smaller cities languish.

Analysts say other cities however, are not expected to follow Tongzhou district, a south-eastern suburb of the capital, as prices in that area had been fuelled by expectations it would become a sub-administrative centre for local government.

Under the rule, non-residents of Tongzhou and those who have not paid social insurance or taxes there for at least three years, are barred from buying second homes in the area, the Beijing municipal commission ofhousing and urban-rural development said in a website statement last Friday.

People without Beijing housing registration must have paid more than five-years’ worth of taxes or social insurance with three-years of that registered in Tongzhou to buy the first home in Tongzhou, it said, saying previous restrictions would stay in place.

Previously, buyers were not required to have paid three years of taxes in Tongzhou or be registered as residents in Tongzhou, to buy homes in the area.